Dihydrofolate reductase (DHFR) modular genes have been constructed with segments containing the adenovirus major late promoter, a 3' splice site from a variable region immunoglobulin gene, a DHFR cDNA, and portions of the simian virus 40 (SV40) genome. DNA-mediated transfer of these genes transformed Chinese hamster ovary DHFR- cells to the DHFR+ phenotype. Transformants contained one to several copies of the transfected DNA integrated into the host genome. Clones subjected to growth in increasing concentrations of methotrexate eventually gave rise to lines containing several hundred copies of the transforming DNA. Analysis of the DHFR mRNA produced in amplified lines indicated the following. (i) All clones utilize the adenovirus major late promoter for transcription initiation. (ii) A hybrid intron formed by the 5' splice site of the adenovirus major late leader and a 3' splice site from a variable-region immunoglobulin gene is properly excised. (iii) The mRNA is not efficiently polyadenylated at sequences in the 3' end of the DHFR cDNA but rather uses polyadenylation signals downstream from the DHFR cDNA. Three independent clones produce a DHFR mRNA containing SV40 or pBR322 and SV40 sequences, and the RNA is polyadenylated at the SV40 late polyadenylation site. Another clone has recombined into cellular DNA and apparently uses a cellular sequence for polyadenylation. Introduction of a segment containing the SV40 early polyadenylation signal into the 3' end of the DHFR cDNA gene generated a recombinant capable of transforming cells to the DHFR+ phenotype with at least a 10-fold increase in efficiency, demonstrating the necessity for an efficient polyadenylation signal. Attachment of a DNA segment containing the transcription enhancer (72-base pair repeat) of SV40 further increased the biological activity of the modular DHFR gene 50- to 100-fold.